Zocdoc Has a Dirty Little Secret

The untold story of how their cancellation policy is among the most punitive in the online reservation industry.

Zocdoc has a secret it wants to keep hidden in the dark. You won’t find it in any of the eye-catching yellow highlights splashed all over their website, or in any of the fine print for that matter. And that’s because, if it gets out it might affect their bottom line. It might even tarnish their reputation. The little-known secret—even amongst physicians who work for practices that use the platform—is that the company’s booking fees are non-refundable after 24 hours, even if a patient decides to cancel their appointment. 

Let that sink in a moment. How can Zocdoc assess a fee, if no service is actually provided? Seems counter-intuitive, right?

Before diving into the nuances of why Zocdoc’s cancellation policy is among the most punitive in the online reservation industry, permit me to pause and say that it is not too late for them to chart a more scrupulous course. They have created an amazing technology that makes our lives more convenient.  If they adopt more reasonable cancellation rules they may be able to win back the good graces of health care workers, help promote better patient care and secure the financial aspirations of the company. 

Now let’s get back to the policy. The truth is, Zocdoc is not the only reservation platform that charges a service provider when a patron chooses to cancel. Some companies do and some don’t, it’s a mixed bag, depending on the specific industry. 

Uber and Lyft do not charge their drivers for bookings or cancelations: both companies face driver shortages and have had legal troubles over the classification of their drivers. Likewise, Airbnb does not charge their hosts when a traveler decides to opt out of a reservation. Airbnb only collects payments when a reservation is kept, or when a traveler cancels inside the host’s protected cancellation window. 

OpenTable, which is the largest of the restaurant reservation platforms, charges one dollar for each booking they generate in addition to a monthly subscription fee. Their booking fees are non-refundable, regardless of whether or not diners ever step foot in a restaurant. These “cover 

fees,” as they’re known in the industry, can add up quickly and are quite unpopular with restaurants. 

In many ways, Zocdoc’s cancellation policy is even more egregious. The healthcare behemoth charges 35-110 dollars, depending on a physician’s specialty, for each new referral that is made through their portal. In Ophthalmology, my specialty, a new patient visit typically reimburses somewhere between 70-200 dollars depending on the insurance carrier and the specific details of the exam – so Zocdoc takes a pretty huge cut. Unfortunately, there are no accommodations made when a patient needs to cancel. After 24 hours, the full fee becomes non-refundable. None of this information is disclosed to patients during the booking process.

Whereas OpenTable and their upstart rival, Resy, provide restaurants with some helpful safeguards, Zocdoc does not offer any comparable tools that encourage patients to use the healthcare platform more responsibly. Take for example, the option to hold a credit card on file. Although some diners might bristle at the suggestion, both dining platforms leave that decision up to the restaurants. Opentable has also adopted a “four strike and you’re out” policy, which suspends diners who fail to show up four times in a calendar year. 

When Zocdoc rolled out in 2007, they offered a month-to-month subscription service, so at that time, cancellations did not incur additional charges. Practices simply paid 250 per month (plus a 300-dollar annual subscription) for each doctor they listed on the platform. Then, in July of 2019 they changed their billing structure to a new model that assesses a fee for each new booking that gets referred by Zocdoc. The penalty for cancellations after 24 hours was implemented along with the rest of this new pricing structure. 

Here in New York City, where the platform is very popular, my practice receives approximately 50 new referrals a month from Zocdoc. Under the old pricing model, we were paying a flat fee of  500 dollars total per month ($250 per month x two physicians). The new model costs us $1750 dollars per month for the exact same number of referrals. That’s a 350 percent increase in price. Similar price inflation, along with the harsh cancellation policy, is the reason why some of the larger players, such as NYU and ENT and Allergy Associates have since left the platform and set up their own online booking portals. 

While Zocdoc asserts that canceled appointments make up a small proportion of the booking fees incurred each month, many medical practices disagree. “We have to be careful not to open up our availability calendar too far in advance, because patients often forget to cancel if they find another provider with an earlier opening,” said Ilona Skigar the practice manager for Century Medical and Dental Group, a large multispecialty group in Brooklyn and Manhattan. In the month of October, she explained, 36 percent of the 512 bookings they received either canceled after 24 hours or didn’t show up. Therefore, in spite of doing everything possible to minimize cancellations, they still racked-up 6440 dollars in fees for patients that never even walked through the door.

The billing structure needed to be changed, according to Zocdoc, so that the company could attract medical practices in suburban and rural areas with fewer users, where the new model would cost less than paying a flat monthly fee. That may be partially true; the new pricing may be more affordable for practices in smaller markets. However, the justification sounds dubious, in light of the fact that Zocdoc is a for profit company with a clear profit motive.

So far, the company has raised over 300 million dollars, with investments coming from Bezos Enterprises and Marc Benioff the CEO of Salesforce, among others. It seems unlikely that Zocdoc would have been able to raise so much capital without the prospect of selling shares to the public in the near future.

Dr Andras Fenyves who owns a medical practice with 10 locations in Brooklyn and Queens had this to say, “The new pricing structure does not bode well for patient care. It puts more stress on the system, forcing physicians to work harder and harder for smaller reimbursements. Zocdoc is entitled to be motivated by profit and to do what they feel is necessary in order to grow, but right now I don’t believe the platform serves the best interests of patients or physicians.”

What he, myself and many other physicians find most discouraging about the new pricing model is the strict cancellation policy. It shrugs-off and tarnishes the special bond of mutual respect between doctor and patient. If people were made aware of it, we believe, most would do their best to cancel within the allotted 24-hour grace period.

There will come a time when a viable competitor enters the marketplace and Zocdoc faces a day of reckoning –the possibility of a mass exodus.  If the company wants to prevent this from happening and win back the loyalty of physicians, they ought to make an effort to do so now. 

Discontinuing the cancellation policy would be a good place to start. That alone, would go a long way to help prevent overbooking, reduce wait times and improve quality of care. It would also show physicians a token of appreciation for their brave work during the pandemic. It might even secure the investments of the company’s financiers. 

In the meantime, if you’re one of the millions of people that use Zocdoc to book appointments, you deserve to know about this well-kept secret. You deserve transparency. You have a right to try and reciprocate the same level of care that you receive from your physicians, even if Zocdoc’s growth strategy prefers that you remain in the dark.

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by Anonymous

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